After installing this and that, I transferred my movies from external hdd
to vista. It was gonna take a while so I left the house for some hour.

When I was back my computer was in sleep mode, (which I never used in XP)
and I pressed this and that button and some wriggles of mouse and clicks and even pressed my power button. Soon whichever did the trick, my screen went from black to Resuming... ( or something similar)

But nothing else happened so I used my reset button on my case to
force it to restart and got it back working.

Here are some questions :

1. During Sleep Mode, will my downloads work? Will torrents or just direct downloads from a website continue to download while in sleep mode?

2. How do I properly wake it up from sleep? I've set it up so I have to
enter my account password but I never even got to that screen so had to reset.

3. If you look at the attached photo, there is "Turn off harddisk after" setting. Right now it is at default 20 minutes. Does this mean that my hdd will turn off 20 minutes after going to sleep? Or just 20 miutes of idle?

4. Lastly, if my downloads won't work during default sleep mode setting, can I change the settings shown in the screenshot to make it possible? If so what settings should I change?

2. You wake up by pressing the power button, or using the mouse and keyboard. These settings are controlled in the BIOS. To enter the password, type it on the keyboard and hit enter - if you set it in the BIOS as a wakeup, thats how - if you mean in vista, it will be a normal login screen.

Not everyone downloads at night, or has anything going on for that matter so sleep mode is fine for the most part, for most cosumers. Most people turn their PC off at night anyway... and don'y even know there is a "sleep mode"